Government can overestimate college costs

Federal listing of college costs often fail to calculate the rising supplements provided by student aid, grants, and loans.

As the New York Times reports, “The government’s official statistic for college-tuition inflation has become somewhat infamous. It appears frequently in the news media, and policy makers lament what it shows.No wonder: College tuition and fees have risen an astounding 107 percent since 1992, even after adjusting for economywide inflation, according to the measure. No other major household budget item has increased in price nearly as much.But it turns out the government’s measure is deeply misleading.

images“For years, that measure was based on the list prices that colleges published in their brochures, rather than the actual amount students and their families paid. The government ignored financial-aid grants. Effectively, the measure tracked the price of college for rich families, many of whom were not eligible for scholarships, but exaggerated the price – and price increases – for everyone from the upper middle class to the poor.The good news is that the Bureau of Labor Statistics has gradually begun to change its methods since 2003, to capture the effects of financial aid. It will take more time to know how well those efforts are working. But the bureau won’t alter the historical data, which means the long-term comparisons will never capture the actual cost of college for American families.

“Those oft-cited comparisons, notes Sandy Baum, a George Washington University professor and an expert on college costs, says, are “certainly misleading.”

“The discrepancy matters because the country is in the midst of a roiling debate about whether college is worth it. Various pundits on both the left and right have taken to claiming that higher education is overrated and often not worth it. The shocking increase in college costs, according to the official Bureau of Labor Statistics numbers, is part of their argument. Continue reading “Government can overestimate college costs”

The true student debt crisis

If you borrowed money from the federal government to finance your education and you’re having an extremely hard time paying it back, I have good news for you. As Slate reports, “President Obama has just signed an executive order that expands eligibility for Pay As You Earn, a newish program that caps the monthly debt payments of eligible borrowers to no more than 10 percent of their monthly income. And if you still have outstanding debt after 20 years, or 10 years if you work in the public sector or for a nonprofit, it will be forgiven, like a youthful transgression.imgres-1

“You crazy kid! Remember when you thought taking on this student loan debt made sense because getting a college education meant that you’d eventually earn enough to pay it off? Oh gosh. Those were the days. Clearly you had been passed the peace pipe once too often.

“Cutting debt payments for cash-strapped borrowers is a nice gesture. In 2008 and 2012, Barack Obama fared well with under-30 voters, and Pay As You Earn will give some of them a nice little boost, just in time for the midterm congressional elections. But there is a much larger problem that the president’s feel-good proposal fails to address, which is the fact that people who take on federal student loan debt aren’t earning enough to pay it back. America’s higher education institutions aren’t offering value for money. And that’s a problem that tinkering with the federal student loan program won’t solve.

“To state the obvious: Borrowers can’t handle their debt payments because of the general weakness of the economy. It would be far easier for borrowers to repay their student loan debt if they weren’t unemployed or underemployed, and it would be easier still if they were employed in jobs that offered robust wage gains over time. Yet the debt crisis also reflects the corruption of mass higher education in America.

Continue reading “The true student debt crisis”

How you do matters more than where you go

The bad news for students applying to selective colleges is that getting accepted to any one of them really is harder than it used to be.images

As the New York times reports, “Many colleges have reduced the number of American teenagers they accept (in order to globalize their student bodies) at the same time that the American teenage population is growing, as I wrote last week.

“But there is some good news, too, and it’s worth spending a few minutes on it. It sheds some light on the right way for high school students to think about the application process.

“First, amid all the anxiety over this subject, students should remember that the college you attend matters less than many people think it does. Research has shown that students with similar SAT scores who attended different colleges — say, Stanford and the University of California, Davis — have statistically identical incomes. (Low-income students are the exception; the college they attend does seem to matter.) Yes, Harvard graduates make high salaries on average, but it doesn’t seem to be because they went to Harvard.I recognize that this research will not convince many teenagers and their parents. They’ll still care enormously about the admissions process. So another bit of encouraging news is also worth considering: Even if an individual college is harder to get into, there seem to be more total spots at excellent colleges.Over the same period that colleges like Harvard and Stanford have been admitting more foreign students, several other changes in higher education have also been occurring. Continue reading “How you do matters more than where you go”

Women accumulate larger student debt

When Kristine Leighton graduated from a private college five years ago with a degree in hospitality, she owed $75,000 on student loans.

Each month, she paid the minimum amount of $450 and lived at home with her parents on Long Island, N.Y.

NPR reports that “At first, she was working at a hotel for $10 an hour; money was tight. Even after she got a job in Manhattan making $75,000 a year, she still couldn’t afford to move out. She funneled her earnings into car

payments, credit card bills and debt, and a monthly commuter train pass. The loan payments left little extra

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money for things like an emergency fund.At one point she upped her monthly student loan payments to around $1,800 for almost a year, in an effort to chip away at her debt as much as she possibly could. To prepare for the future.”I was trying,” Leighton says.

“I had this great job, this great career, but I still couldn’t afford to move out of my parents’ house.

“Women have made gains in the workplace but there’s still a wage gap. Although attending college costs the same for both genders, women are more burdened by student loan debt after graduating. They spend a higher proportion of their salaries on paying off debt because, well, they have lower salaries to work with than men — from the very start.After college, with $75,000 in student debt, Kristine Leighton struggled to pay it off and start her adult life. “I was trying,” she says. “But I still couldn’t afford to move out of my parents’ house.”

“A study by the American Association of University Women found that one year after college, nearly half of women working full time, and 39 percent of men, were devoting more than 8 percent of their income toward their debt. That may seem small, but when you are fresh out of college, the combination of living expenses, credit card bills or debt, a 401(k) and a little left over for savings — if you can hack it — adds up. Continue reading “Women accumulate larger student debt”

Having millionaires help with student debt

Sen. Elizabeth Warren (D-MA) laid out a new plan that would tax millionaires and use that revenue to help students

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refinance their student loans, as reported by ThinkProgress

“Delivering the keynote address at the Higher Ed Not Debt Campaign launch event on Thursday at the Center For American Progress, Warren argued that America faces a choice: “Do we invest in students, or millionaires?” Warren plans to introduce a bill that would create an “America that invests in those who get an education” by revising the tax code and enacting the Buffet rule.

“The Buffet rule is named after billionaire Warren Buffet and would establish a minimum tax on income in excess of $1 million. The measure, which never got out of Congress, raises approximately $50 billion in revenue and ensures that millionaires do not pay lower tax rates than middle-class families.

“Congress acted to lower the federal unsubsidized student loan interest rate to 3.86 percent for undergraduates for the 2012-2013 academic school year. But unless it acts again, the $1.2 trillion in outstanding student loan debt will continue to grow.

“Warren’s plan would allow students with outstanding student loans to refinance at lower rates. The cost of the change would be covered by a “dollar for dollar” effort where for “every dollar the Buffet rule brings in, we use that dollar to refinance student loan debt,” she explained. She estimated that recent graduates who borrowed the maximum in undergraduate loans could see their payments drop by $1,000 a year and total interest paid over the life of the loan could be cut nearly in half. Continue reading “Having millionaires help with student debt”

Ranking schools by student happiness

The Obama administration wants to produce new ratings that will allow prospective college students to identify institutions with high graduation rates, solid job placement records and generous student aid. But what if students just want to be happy?imgres

“A study discussed in Insidehigher Ed today documents the statistically significant impact of several Princeton Review rankings of colleges on quality-of-life issues. A”t least according to the study, applicants may be be swayed not just by academics (or the qualities the Obama administration wants to highlight) but by rankings that indicate that students are happy, and think that their campus is beautiful.

“The quality-of-life ranking of the Princeton Review that receives by far the most press attention (party school), however, does not appear to have much of an impact on the applicant pool, with the exception of a decline in applications only evident among out-of-state students.

“Princeton Review rankings are fairly well known in admissions circles for their limitations. The rankings are based entirely on student surveys at their own institutions. So students are reacting to how they feel about student happiness, interaction with professors and the quality of food — without any basis for comparison to other institutions. No part of the ranking actually involves anyone comparing institutions. But the study being released today — being published in Educational Evaluation and Policy Analysis — says that these rankings matter to prospective students. (The article abstract is available here.) Continue reading “Ranking schools by student happiness”

What is merit, anyway?

As college presidents went to the White House Thursday to talk about new efforts to attract more low-income students to higher education,admissions leaders gathered here and talked about how they define merit.

InsideHigherEd asks, “Who is admitted? Who gets aid? When spots and the aid budget are limited, who gets priority status?

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“Speakers turned to definitions (from dictionaries, Latin and Greek) and to philosophy, and generally agreed that merit in higher education must mean more than having the highest grades and test scores. But beyond that, things get complicated. Recruiting a more socioeconomically diverse class is a great thing, everyone seemed to agree at the annual conference of the Center for Enrollment Research Policy and Practice of the University of Southern California.

“But is that still the case if your rankings slip and your SAT average drops a smidge? Nancy Cantor, who spoke here, was described as heroic by many for doing that at Syracuse University. But Cantor has left Syracuse and her successor seems much more interested in rankings than she was. And for institutions that compete for students, decisions that might be applauded here as ethical can be quite difficult. A case study was presented by Jenny Rickard, vice president for enrollment at the University of Puget Sound. She described how Puget Sound, between the 1970s and today, evolved from a local commuter college to a national liberal arts college, attracting increasingly competitive students.

Continue reading “What is merit, anyway?”

Linking tenure to student success

An administrative law judge in Florida this week upheld new rules by the State Department of Education that require significantly more of state college faculty members — particularly in the areas of student success — for them to earn continuing contracts (the equivalent of tenure).

As InsiderHigher Ed reports, “The United Faculty of Florida, the faculty union in the state, had challenged the new rules as beyond the scope of the department’s powers. But the judge rejected that view and said that the board was within its rights. The rules affect faculty members at the state college system, which was formerly a community college system but no longer uses that label as many of the former community colleges have introduced some four-year programs. The system — with 28 colleges, nearly 25,000 faculty members and 879,000 students — is among the largest in the United States.

“Colleges and universities nationally have been under increasing pressure to demonstrate their success (as institutions) in student learning. And there has been a strong push in some K-12 districts to evaluate teachers in part based on student learning gains as measured by tests. But the movement is unpopular with educators, who say that such systems tend to punish instructors who — however talented and committed they are — teach poorly prepared or disadvantaged students.

The rules that have now been approved state that each district president, after consulting with faculty, should develop a system to evaluate faculty members, using “appropriate criteria to measure student success.” Those criteria “may include”:

  • Demonstrated or documented learning gains.
  • Course completion rates.
  • Graduation and/or certification rates.
  • Continued success in subsequent and additional courses or educational pursuits.
  • Job placements in the appropriate field.

“The criteria would be used not only for awarding new continuing contracts, but also for the equivalent of post-tenure reviews, which are also mandated by the new rules. The faculty challenge to the new rules said that the state board lacked the authority to make such specific changes in the way continuing contracts are awarded.”

Read more: http://www.insidehighered.com/news/2013/12/27/judge-upholds-new-florida-rules-tenure-and-student-success#ixzz2ojrmytlt
Inside Higher Ed

Student loan defaults hit record levels

he rate at which borrowers of federal student loans default on their debt within two years after beginning repayment rose for the sixth consecutive year, reaching its highest level since 1995, according to data released Monday by the Education Department.

One in ten borrowers across the country, 475,000 people, who entered repayment during the fiscal year ending in September 2011 had defaulted by the following September, the data showed. That’s up from 9.1 percent of a similar cohort of borrowers last year.

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Even more borrowers are struggling in delinquency when the period of measurement is extended to three years. The percentage of borrowers defaulting within three years after beginning repayment has also risen from 13.4 percent to 14.7 percent for the most recent cohort of borrowers available (those who entered repayment from October 1, 2009 to September 30, 2010 and had defaulted by September 2012). The 14.7 percent default rate represents 600,000 borrowers.

The default rate is used by the Education Department to potentially cut funding to institutions that have high large proportions of borrowers defaulting on their loans. Colleges are currently barred from receiving federal student aid money if their default rates are 25 percent or higher for three consecutive years or if they exceed 40 percent in a single year.

The Education Department is in the process of transitioning to using only the three-year default rates. Next year will be the first year for which institutions will face penalties based on their three-year rates, which student advocates say is a welcome change since the measurement will be more expansive. Still, though, some argue that the cohort default rates don’t reflect the full burden of debt that students borrow. Continue reading “Student loan defaults hit record levels”

Public universities cutting student aid

Public colleges and universities were generally founded and financed to give students in their states access to an affordable college education.images

The Chronicle of Higher Education reports that this seems to be be changing.

“They have long served as a vital pathway for students from modest means and those who are the first in their families to attend college. But many public universities, faced with their own financial shortfalls, are increasingly leaving low-income students behind—including strivers like Ms. Epps.

“It’s not just that colleges are continuously pushing up sticker prices. Public universities have also been shifting their aid, giving less to the poorest students and more to the wealthiest. A ProPublica analysis of new data from the U.S. Department of Education shows that, from 1996 through 2012, public colleges and universities gave a declining portion of grants—as measured by both the number of grants and the dollar amounts—to students in the lowest quartile of family income. That trend continued even though the recession hit those in lower income brackets the hardest.

“Attention has long been focused on the lack of economic diversity at private colleges, especially at the most elite institutions. What has been little discussed, by contrast, is how public universities, which enroll far more students, have gradually shifted their priorities—and a growing portion of their aid dollars—away from low-income students. State colleges are typically considered to offer the most affordable, accessible four-year education students can get. When those institutions raise tuition and don’t offer more aid, low-income students are often forced to decide not just which college to attend but whether they can afford to attend college at all. “The most needy students are getting squeezed out,” said Charles B. Reed, a former chancellor of the California State University system and of the State University System of Florida. Continue reading “Public universities cutting student aid”

College student poverty

According to the National Center for Education Statistics, 29 percent of students nationwide have household incomes below $20,000, 79 percent work full or part time in addition to taking classes, and 35 percent are parents or have dependents (17 percent are single parents). ThinkProgress reports that “These financial burdens can constrain college students’ potential. Many are forced to drop out of school, creating a vicious cycle of poverty because without education, it is increasingly difficult to emerge out of poverty and enter the middle class.images

“Overall, more college students are having to work long hours to finance their educations. The American Community Survey found that in 2011, 19.6 of undergraduates nationwide worked a full-time, year-round job. By contrast, in 2005, just under 10 percent of college students were working full time.

“The Census paper also notes that 63.3 percent of college students live with their parents or relatives, suggesting that the sluggish economy is making it difficult for students to attend college further from home and live on their ownPoverty rates in many areas of the country decline significantly when they exclude off-campus college students living on their own, a new Census Bureau working paper finds.The Census Bureau calculated that 15.2 percent of the population officially lives in poverty. But for college students living off-campus and not living with relatives, the poverty rate is 51.8 percent. When eliminating them from the official poverty rate calculation, only 14.5 percent of Americans live below the poverty level.College students who live in dorms are automatically eliminated from calculations of the poverty rate, but students living off-campus are not, so the Census Bureau isolated data for these students recorded by the American Community Survey from 2009 to 2011. Continue reading “College student poverty”

Separate yet unequal

Higher education is increasing divided by economic class.

It’s been almost 60 years since the 1954 Supreme Court decision Brown vs. Board of Education led to the dismantling of segregated schools in the South, reports Huff Post College.  “While legal segregation was halted, public schools especially in large cities have become increasingly segregated by circumstance. Now higher education is under scrutiny for having established a segregated system, this time primarily by socio-economic status.Unknown

“While undergraduate higher education in the U.S. can be parsed in a variety of ways, the biggest division is between the growing community college segment and that of four year public and private universities and colleges. Surprising to many, community colleges enroll 45% of all undergraduates and that fraction is growing. Moreover, the majority of all black and Latino undergraduates are enrolled at community colleges.

“Compared with students at senior institutions, community college students come from markedly poorer families. The details are documented in new research, Bridging the Higher Education Divide, by The Century Foundation. The report’s conclusion is clear: four year colleges, especially the elite privates, draw primarily from the top income brackets, while community college students come primarily from lower income groups. And since 1982 the gap is widening with fewer community college students coming from the top fourth of the income scale.

“Moreover, community colleges are neglected when it comes to federal and state funding. Thus expenditures by the federal government go primarily to private and public research institutions and state support per student is typically higher at state universities compared with community colleges. Continue reading “Separate yet unequal”

How long to make your dissertation

The best part about writing a dissertation is finding clever ways to procrastinate. The following appears in a blog located (identified?) as R Is My Friend.”The motivation for this blog comes from one of the more creative ways I’ve found to keep myself from writing. I’ve posted about data mining in the past and this post follows up on those ideas using a topic that is relevant to anyone that has ever considered getting, or has successfully completed, their PhD.images

“I think a major deterrent that keeps people away from graduate school is the requirement to write a dissertation or thesis. One often hears horror stories of the excessive page lengths that are expected. However, most don’t realize that dissertations are filled with lots of white space, e.g., pages are one-sided, lines are double-spaced, and the author can put any material they want in appendices. The actual written portion may only account for less than 50% of the page length. A single chapter may be 30-40 pages in length, whereas the same chapter published in the primary literature may only be 10 or so pages long in a journal. Regardless, students (myself included) tend to fixate on the ‘appropriate’ page length for a dissertation, as if it’s some sort of measure of how much work you’ve done to get your degree. Any professor will tell you that page length is not a good indicator of the quality of your work. Regardless, I feel that some general page length goal should be established prior to writing. This length could be a minimum to ensure you put forth enough effort, or an upper limit to ensure you aren’t too excessive on extraneous details. Continue reading “How long to make your dissertation”

Prestige versus value in college choice

Having a choice is generally a good thing, and being able to choose among several college acceptances should be a wonderful thing indeed, as Paul Sullivan wrote this past week in the New York Timesimages

“But let’s face it: the cost of a college education these days ranges from expensive to obscenely expensive. So the decision is likely to be tougher and more emotional than most parents and children imagined as they weigh offers from colleges that have given real financial aid against others that are offering just loans.

“While some students will be able to go to college only if they receive financial aid and others have the resources to go wherever they want, most fall into a middle group that has to answer this question: Do they try to pay for a college that gave them little financial aid, even if it requires borrowing money or using up their savings, because it is perceived to be better, or do they opt for a less prestigious college that offered a merit scholarship and would require little, if any borrowing? It’s not an easy decision.

Full story: http://www.nytimes.com/2013/04/20/your-money/measuring-college-prestige-vs-price.html?pagewanted=all&_r=0

Let’s actually talk about student loans

There is more student loan debt outstanding — $1 Trillion — than credit card debt! And the government is making a huge profit on it — an estimated 36 percent profit margin, reports the Huffington Postimages-1

“Here’s the real shame: The government gets to borrow for 10 years paying less than 2 percent interest on U.S. Treasury notes, while students must pay 6.8 percent interest on the loans they get from the government!

“The government is ripping off college students, leaving them with a burden of debt that averages $27,000, and for many exceeds $100,000, while they are forced to pay above-market interest rates.

“Students will spend so much time and pay so much interest getting out of student loan debt that most will never be able to afford to buy a home. Today’s homebuyers can get a 3.5 percent, 30-year fixed-rate mortgage. But today’s students may never get to take advantage of today’s low mortgage rates, because the government demands twice that rate to pay off their student loan debt. Continue reading “Let’s actually talk about student loans”